Office of Student Financial Aid

OfficeofStudentFinancialAid MED School Loan Repayment Amy Whitford, Financial Aid Counselor, 608-262-3060, finaid@finaid.wisc.edu Sandi Nowakowski, Federal Direct & Private Loan Manager, 608-262-4987, directloans@finaid.wisc.edu

Building Your Repayment Strategy Identify Your Loan Debt • Loan Types • Evaluate my debt amounts, interest, and servicers How do I repay? • Consolidation (www.studentloans.gov) • Repayment Plans • Forgiveness What if I need help? • Forbearance & Income-Based Repayment • Deferment • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Identify Your Loan Debt - Loan Types Federal Family Education Loan Program (FFELP) • Stafford Subsidized Loan • Stafford Unsubsidized Loan • FFEL Consolidation Loan William D. Ford Direct Lending (DL) • Federal Direct Stafford Subsidized Loan • Federal Direct Stafford Unsubsidized Loan • Direct Subsidized Consolidated Loan • Direct Unsubsidized Consolidation Loan • Perkins Loan • Grad PLUS Loan (FFEL or DL) • Institutional Loans • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Federal Subsidized and Unsubsidized Loans • William D. Ford Federal Direct Subsidized and Unsubsidized Loans • Department of Education is the lender, payments go to servicer. • Federal Direct Subsidized Loan • Fixed interest did not accrue while you were in school. • Federal Direct Unsubsidized Loan • Fixed interest rate • Direct Consolidated Subsidized or Unsubsidized Loan • Paid into a consolidation loan • All borrower benefits are adjusted. • Interest rate built from a weighted average of loans consolidated. • Federal Family Education Loan Program (FFELP) • Chose a lender, payments go to servicer. • No new loans originated after 2010. • Subsidized Stafford Loan • Didn’t accrue interest while you were in school. • Fixed interest rates • Unsubsidized Stafford Loan • Fixed interest rate • FFEL Consolidated Loan • Loans paid into one consolidation loan. • All borrower benefits adjusted. • Interest based on consolidated average. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Federal Direct Graduate PLUS • Payment goes to servicer. • Interest starts accruing after disbursement. • Repayment begins 60 after the student falls below half-time enrollment. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Perkins Loan • 5% interest rate. • No interest during school • 9 month grace period • Lender is the school, payments go to the school. • Can be consolidated with Subsidized and Unsubsidized loans. • Letters sent in April for mandatory exit counseling at ECSI.net • Forgiveness available • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Institutional Loans Dredge Loan & Manchester Loan • No interest while in school • 5 year grace period • 5% interest which begins accruing after the grace period • Letters sent in April for mandatory exit counseling at ECSI.net Primary Care Loan • No interest while in school • 1 year grace period but can request deferment during residency; no interest during grace or deferment • 5% interest during repayment • Must certify annually that you are practicing primary care until loan is paid in full • Letters sent in April for mandatory exit counseling at ECSI.net • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

WI Medical Society Loan WI Medical Society Loan • 6.8% • No interest accrual while in school • 2 month grace period • Interest starts accruing after the grace period. • Forbearance can be requested with WMS. • Exit Counseling included in packet. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

How do I repay? Determine when your grace periods end for each loan. • Sub & Unsub - 6 months. • Perkins - 9 months • PPLUS has no grace period • Manchester & Dredge – 5 yrs. • WMS – 2 months Do you need to consolidate? • Done with school? • Split servicer? • Mixture of FFEL & DL if I’m entering PSLF? Complete Stafford Exit Counseling at nslds.ed.gov • Get a good idea of repayment plans that fit your borrower profile. Complete Institutional and Perkins Loan Exit Counseling at ECSI.net Create an action plan & payment priority. • How long will it take you to repay and what are your career/life goals? • What is the most expensive loan you owe and how quickly can it be paid? • Graduate School Plans? Be aware about the elimination of graduate professional subsidy. Setup your payment plan(s) and auto-debiting (.25% interest reduction). • Repayment plan and Auto-debit can be setup on the servicer’s website or over the phone. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Evaluate Your Federal Loans • Log onto nslds.ed.gov – National Student Loan Data System (NSLDS) • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Identify your Campus-based and private loan debt on your free credit report. • Lenders • Amounts • Interest rate

Loan Forgiveness Public Service Forgiveness • Work full-time for 10 years • state, federal, or non-profit • 120 monthly consecutive on-time payments • IBR, ICR, Standard repayment plan Non-Profit Agency Search Engines • http://www2.guidestar.org/Home.aspx • http://www.ahadataviewer.com/# • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Perkins Loan Forgiveness ECSI.net http://www.ecsi.net/bwr/forms/r7-index.html Application for Partial Loan Forgiveness • Peace Corp or Vista Volunteer • Criminal Justice System • Nurse or Medical Technician • Providing a public or non-profit service to high-risk children • Provider of early intervention services • Employed Firefighter • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Consolidation Consolidation Criteria • Done attending school • At least 2 outstanding federal loans • Grace period has ended • Private loans can’t be consolidated • Mixture of FFEL & DL loans • Multiple servicers • DL Split Servicer Initiative • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Consolidation Complete consolidation at www.loanconsolidation.ed.gov Application Process • Application & MPN required • 3 month processing time • *Report loan type (FFEL or DL) on the application • *Report principle + outstanding interest = total loan amount on the application • *DO NOT forget a loan when reporting on the application • Setup interim consolidation processing repayment plan Consolidation Outcome • Weighted average determines interest rate of DL Consolidation loan. • Creates a new DL Sub Consolidation Loan or DL Unsub Consolidation Loan. • One loan, one servicer, access to DL borrower benefits. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Repayment Plans • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Married Students & IBR • Married Filing Taxes Jointly – • Only one spouse has educational loan debt - both spouses’ income and only your debt is considered. • Both spouses have educational loan debt – both spouses’ income and both spouses’ educational debt is considered. • Can’t deduct loan interest payments in taxes. • Married Filing Taxes Separately – • Only your income and debt is considered. • Consult a tax advisor regarding the benefits of filing jointly or separately with regards to your tax refund. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

Estimated Time of Repayment AAMC Example • Income-Based Repayment Plan – Principal Debt amount $140,000 • During 4 years of residency with a median stipend - loan payment of $420-$540 per month. • Increase in salary after 4 year residency - $200,000 starting salary • Family size of 1 • Payment amount of $1,838 for 11.8 years to pay loan off in full. • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

What if I need help? Environment of support • Stay in contact with your servicer. • Repayment plans are fluid. • Contact our office if you need advice. Partial Financial Hardship Deferment • Reduction in income • Contact servicer • Billing postponed • Interest frozen on Sub and Perkins • Use really sparingly…Interest capitalizes when deferment ends • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

What if I need help? Income-Based Repayment Plan • Lowest monthly payment required can be zero. • Forbearance and deferment capitalizes interest • Best to make some payment rather than no payment at all Forbearance • USE SPARINGLY! Interest still accrues and capitalization occurs! • Contact servicer for billing to be postponed • Example: $150,000 of student loans placed in forbearance for 4 years • ADDITIONAL interest of $56,343 • Monthly payment after forbearance would increase from $1,726 to $2,195 (based on 10 year repayment period & 6.8% interest rate) • Federal Direct & Private Loans , Office of Student Financial Aid • Individual Repayment Counseling offered by appointment (phone or in-person) • 608-262-4987, directloans@finaid.wisc.edu, finaid.wisc.edu/direct-loans.htm

MED School Loan Repayment • Questions? Amy Whitford, Financial Aid Counselor 608-262-3060, finaid@finaid.wisc.edu Sandi Nowakowski, Federal Direct & Private Loan Manager 608-262-4987, directloans@finaid.wisc.edu OfficeofStudentFinancialAid

Office of Student Financial Aid